The chief purpose of this dissemination conference (AHRQ - PAR-00- 141) is to present research results from the "Understanding Medical Necessity Decision-Making" project and to elicit feedback and policy recommendations from stakeholders. The research, funded by The Robert Wood Johnson's Changes in Health Care Financing and Organization (HCFO) Initiative, was awarded to the Center for Health Policy at Stanford University and concludes August 31, 2001. This one and a half-day conference outside of Washington D.C. (Fall, 2001) would be an important step in understanding and implementing the results of the research. The research that will be disseminated at this conference addresses an issue of policy significance and controversy -- how "medical necessity" decisions are made in managed care and the impact of state and national policy on these decisions. The criteria by which medical necessity has generally been defined are inherently vague, and conflicts among consumers, physicians, and insurers over a definition of the term and its application to individual coverage, have brought the discussion of medical necessity to state legislatures, the Medicare program, and the U.S. Congress for resolution. Legislators and regulators are being asked to define medical necessity and the process by which it is applied in order to reduce variability in interpretations and to ensure more consistent, high quality and appropriate coverage decisions. The conference will report the results of a 50 state survey of medical directors and state regulators, examining the impact of state regulation on managed care practice, and the way evidence and cost effectiveness information are used in decision-making. The conference will open with an overview of medical necessity issues by Dr. David Eddy; presentation of research results by Dr. Alan Garber, Dr. Linda Bergthold and Sara Singer of the Center for Health Policy, Stanford University; comment and feedback from consultants to the project, Dr. William Sage and Dr. Wade Aubry; small and large group discussions moderated by knowledgeable experts; and a concluding opportunity for participants to make policy recommendations to state and national policymakers. A final report will be published and posted on the Stanford website, and a listserve will be developed for ongoing discussion among conference participants.